Sri Lanka’s tea industry could expand market share and overcome the problem of high production costs and worker shortages by focusing on the high end of the market and producing only the finest quality teas, as Japan does, says Anslem Perera, a top exporter and chairman of Colombo Tea Traders’ Association (CTTA), .
Branded tea exporters were exploring ways to market more value-added teas and are looking at products such as pyramid tea bags and RTDs (Ready-to-Drink) teas, he said at a news conference organised by the Sri Lanka Tea Board, the Colombo Tea Traders’ Association and the Ceylon Chamber of Commerce last week to announce plans to mark the 150th anniversary of tea in Sri Lanka next year. “The industry is also looking at iced teas - many exporters are considering it. The cost factor of shipping liquid is what’s deterring it at present,” Perera said. “A model to look at in the future is Japan which has one of the world’s highest labour costs but they produce good tea – only excellent teas,” Perera said.
“Maybe Sri Lanka will have to come to a stage where we produce very good teas – for Sri Lanka to produce only excellent teas, that fetch US$10 a kilo on average,” he said.
In Japan, considered as one of the most sophisticated tea markets in the world, the cheapest tea is in the $8-10 range and highest around $300.
“Maybe Sri Lanka could produce less tea at a much higher price with fine quality,” Perera said. “There are consumers who buy excellent tea at very high prices,” Perera said.
He said that the industry had suffered in the plast few years because of low prices due to problems in the main tea markets but that nevertheless the country had always managed to sell all the tea it produced. “We sell everything we produce.”
In Russia, also a big market for tea, there was potential for selling fine, high-priced teas, Perera said.
“In Russia very exclusive teas are sold but they also sell mediocre low-priced teas. We’re now seeing more Sri Lankan brands and Lion Logo brands than anything else in Russia. It has more tea shops than anywhere else except China which has its own tea. In-between beer and vodka, they drink tea. Right throughout the day most Russian homes have samovars, boiling water for tea,” he said.